Cochin Shipyard profit halves as shipbuilding reports loss

Cochin Shipyard Limited reported consolidated profit after tax of Rs 53.77 crore for the quarter ended September 30, 2026, compared with Rs 107.53 crore a year earlier, as shipbuilding posted a Rs 6.08 crore profit before interest and tax loss despite revenue of Rs 783.14 crore.

Why did Cochin Shipyard’s quarterly profit decline?

Cochin Shipyard’s quarterly profit declined because consolidated expenses rose faster than income in the quarter ended September 30, 2026. Revenue from operations increased to Rs 1,249.19 crore from Rs 1,118.59 crore a year earlier, while total income rose to Rs 1,331.81 crore from Rs 1,245.88 crore. Total expenses, however, increased to Rs 1,256.72 crore from Rs 1,095.97 crore, reducing profit before tax to Rs 75.08 crore from Rs 149.91 crore.

Profit after tax fell to Rs 53.77 crore from Rs 107.53 crore, and basic and diluted earnings per share declined to Rs 2.04 from Rs 4.09. Cochin Shipyard reported no exceptional items in either September quarter. Operating margin, as disclosed by the company, fell to 8% from 15%, while net profit margin declined to 4% from 10%.

How did shipbuilding affect Cochin Shipyard’s earnings?

Cochin Shipyard’s shipbuilding segment recorded a profit before interest and tax, or PBIT, loss of Rs 6.08 crore in the September 2026 quarter, compared with a PBIT profit of Rs 149.71 crore in the September 2025 quarter. Segment revenue nonetheless rose to Rs 783.14 crore from Rs 758.98 crore. The quarterly revenue increase therefore did not produce a positive shipbuilding segment result.

The sequential movement was also marked: shipbuilding PBIT was Rs 63.89 crore in the quarter ended June 30, 2026 before the Rs 6.08 crore loss in the September quarter. Revenue increased over the same two quarters, from Rs 700.04 crore to Rs 783.14 crore. For the half year ended September 30, 2026, shipbuilding revenue rose to Rs 1,483.19 crore from Rs 1,197.96 crore, but PBIT fell to Rs 57.81 crore from Rs 186.12 crore.

Shipbuilding assets stood at Rs 11,266.96 crore at September 30, 2026, compared with Rs 9,389.32 crore a year earlier, while segment liabilities increased to Rs 6,528.24 crore from Rs 4,379.34 crore. Shipbuilding was the only operating segment to report a PBIT loss in the September 2026 quarter. Ship repair generated positive PBIT, while unallocated activities reported a Rs 35.67 crore loss.

Did ship repair offset Cochin Shipyard’s shipbuilding loss?

Cochin Shipyard’s ship repair segment remained profitable, reporting September-quarter PBIT of Rs 143.34 crore, up from Rs 67.20 crore a year earlier. Ship repair revenue increased to Rs 466.05 crore from Rs 359.60 crore. The segment’s PBIT was higher than its Rs 135.02 crore result in the preceding June 2026 quarter, when revenue was Rs 394.17 crore.

For the half year ended September 30, 2026, ship repair revenue was Rs 860.22 crore, below Rs 989.23 crore in the corresponding prior-year period. Half-year PBIT also declined to Rs 278.36 crore from Rs 345.44 crore. The September-quarter improvement in ship repair therefore did not reverse the year-on-year decline in the half-year segment result.

Consolidated segment PBIT totalled Rs 101.60 crore in the September 2026 quarter, compared with Rs 170.06 crore a year earlier. Finance cost increased to Rs 26.52 crore from Rs 20.15 crore, leaving profit before tax of Rs 75.08 crore. Cochin Shipyard also recorded a Rs 1.59 lakh share of loss from its joint venture during the quarter.

What cost and balance-sheet changes did Cochin Shipyard report?

Cochin Shipyard reported materials consumed of Rs 682.78 crore in the September 2026 quarter, compared with Rs 554.76 crore a year earlier. Subcontract and other direct expenses rose to Rs 275.80 crore from Rs 242.02 crore, and employee-benefit expense increased to Rs 127.90 crore from Rs 114.27 crore. Provision for anticipated losses and expenditure fell to Rs 8.41 crore from Rs 20.56 crore.

Consolidated total assets were Rs 15,955.50 crore at September 30, 2026, up from Rs 14,530.65 crore at March 31, 2026. Trade receivables rose to Rs 775.70 crore from Rs 423.22 crore, inventories increased to Rs 2,380.25 crore from Rs 2,288.36 crore, and other current assets rose to Rs 6,204.74 crore from Rs 5,278.11 crore. Bank balances other than cash and cash equivalents declined to Rs 1,846.52 crore from Rs 2,300.55 crore.

The debt-equity ratio was 0.29 at September 30, 2026, compared with 0.10 a year earlier and 0.21 at June 30, 2026. The current ratio was 1.32, against 1.30 a year earlier, while the debt service coverage ratio was 0.17 compared with 1.74. Net worth increased to Rs 6,070.46 crore from Rs 5,697.29 crore a year earlier.

What is the status of Cochin Shipyard’s passenger-vessel contracts?

Cochin Shipyard said contractual delivery dates for two 1,200-passenger vessels for the Andaman and Nicobar Administration had expired on April 29, 2023 for SH.0023 and October 30, 2023 for SH.0024. At September 30, 2026, SH.0023 was 54.84% complete and SH.0024 was 55.19% complete. Delivery activity was abated at the buyer’s request while the vessels are considered for reallocation.

The company said reallocation would require significant technical modifications and cost because the vessels were designed for specific operations between the Andaman Islands and mainland India. Liquidated damages recognised through September 30, 2026 were Rs 118.14 crore for SH.0023 and Rs 97.56 crore for SH.0024. Revenue recognised after considering those damages was Rs 169.46 crore for SH.0023 and Rs 171.62 crore for SH.0024.

Both the Andaman and Nicobar Administration and the Union Territory of Lakshadweep Administration have indicated willingness to take over a vessel in its current under-construction state, subject to modifications, according to Cochin Shipyard. The company said it would review accounting estimates and provisioning as more information becomes available. Its board also recommended an interim dividend of Rs 3 per equity share of face value Rs 5 on November 10, 2026.

Conclusion

Cochin Shipyard’s September 2026 result combined higher revenue with lower profit because shipbuilding moved from Rs 149.71 crore of PBIT profit a year earlier to a Rs 6.08 crore loss. Ship repair delivered Rs 143.34 crore of PBIT, but that contribution did not fully offset the shipbuilding reversal, higher operating costs and increased finance cost.

The next disclosed matter to watch is the outcome of discussions on transferring or modifying the two incomplete 1,200-passenger vessels. Cochin Shipyard has said it will reassess accounting estimates and provisioning as information develops, while the recommended Rs 3-per-share interim dividend is the other shareholder action disclosed on November 10, 2026.